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Providers could be doing more to help accelerate the transition to new health
care delivery and reimbursement systems, and the government could help by
setting more deadlines on the path to future reforms, current and former Obama
administration health care officials said May 22 at a panel discussion.

Within a decade, the nation's health care system will be transformed from one
relying on fee-for-service reimbursement to new models featuring bundled and
capitated payments and higher-quality care, panelists said at a discussion
sponsored by the Center for American Progress (CAP), a liberal think tank. But
more needs to be done now, they said.

Ezekiel J. Emanuel, a senior fellow at CAP and former health care adviser to
President Obama, said more deadlines are needed from the federal government so
providers can accelerate the transition to new models of payment and care.

Provisions in the Patient Protection and Affordable Care Act are spurring
development of new payment systems in Medicare, Medicaid, and the private sector
that by 2022 or earlier will produce a reimbursement system in which only about
20 percent of payments to providers will be fee-for-service, Emanuel said.

“These changes are baked into the ACA,” he said.

Missing Deadlines.

Emanuel said many provisions in the law have deadlines, such as the
implementation of new health insurance exchanges, which are to be in operation
by 2014. But he said deadlines are missing from payment reform initiatives,
throwing uncertainty into provider planning.

“We need deadlines,” he said. “We need more certainty in the transformation
of the payment system.”

“I would like to see a bundled payment system rolled out.
We've done the experimenting.”

--Ezekiel J. Emanuel, former Obama health care
adviser

Emanuel said providers want to do their part to help develop and implement
new payment systems. But the current payment system that reimburses them is
based on utilization and penalizes them by reducing reimbursement if they
deliver better care more efficiently.

“Right now, if you do the right thing, you lose money,” he said.

Emanuel said the federal government has done enough experimenting with new
payment systems, and it is time to implement them permanently.

“I would like to see a bundled payment system rolled out,” he said. “We've
done the experimenting.”

Glide Path Needed.

Emanuel said providers should be given a “glide path” detailing time frames
for transition to new delivery systems, so they have time to plan what changes
to make.

Emanuel said although Medicare payment bundling demonstrations are in the
reform law, providers remain leery they will become permanent.

“It may or may not happen,” he said, noting that many providers share this
view. “Do you invest or do you not invest? So they just sit on the fence.”

Emanuel said payment demonstrations implemented to date by the Centers for
Medicare & Medicaid Services and in the reform law “are too small. We can't
do little things. It's really a comprehensive engineering of the process” that
is needed.

Demo Starts in September.

Echoing those comments, Richard J. Gilfillan, director of the CMS Innovation
Center, said some hospital and health care systems are tackling the issue of
transforming the health care system, but many more are not engaged.

“We should look CEOs in the eye and say, 'The country needs you now,'”
Gilfillan said. “The systems to support them are there now.”

Gilfillan said those in the provider and insurer communities have the desire
to implement new systems. For example, he said, CMS officials two weeks ago met
with 110 representatives from 51 national and local insurers for a demonstration
on new ways to pay physicians, expected to start in September in seven markets
involving 75 physician practices.

Gilfillan said CMS is accepting applications until the end of June for a
bundled payment demonstration, about which the agency has garnered “a lot of
interest from providers.” He said CMS is reviewing applications for the first
part of the demo, concerning gainsharing programs. Gainsharing involves
providers working together to manage care and sharing in any cost savings that
result.

“Bundling of payments is going to be the simplest and next step” in health
system reform, added Morey Menacker, president of the Hackensack
Physician-Hospital Alliance in New Jersey. “Whether that's the end, I don't
know.”

Menacker said that within a decade, the role of health insurers will be to
sign up consumers and place them in appropriate networks and then pay providers
for delivering coordinated care to patients.

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